Thailand Equity Picks


While the benchmark Stock Exchange of Thailand (SET) Index has risen +3.5% since our last update, our portfolio managed to give investors an impressive return of +9.0% during the same period, strongly...
Group Research22 Apr 2019
  • Add Kiatnakin Bank Plc. , Amata Corporation, AIM Industrial Growth REIT and PTT Plc.
  • Remove Indorama Ventures, Delta Electronics, and LH Hotel Leasehold REIT
Photo credit: AFP Photo


Overview

While the benchmark Stock Exchange of Thailand (SET) Index has risen +3.5% since our last update, our portfolio managed to give investors an impressive return of +9.0% during the same period, strongly outperforming the general market. The strong performance was led by the jump in the share prices of Bangkok Expressway and Metro (BEM), LH Hotel Leasehold REIT (LHHOTEL) and WHA Premium Growth Freehold and Leasehold REIT (WHART).

Looking forward, the market is likely to remain highly volatile in the near term. Key risks remain on the external front, and still unclear domestic political situation. Despite the peaceful election on 24 March 2019, the official election result has yet to be released on 9 May. Based on the unofficial election result, it is expected that the new multi-party coalition government (probably led by Palang Pracharath Party) will have a marginal lead over the opposition party. This raises concerns over the stability of the new government. The increase in Thailand’s weighting in MSCI Index following NVDR inclusion in May 2019 is, however, a key positive near term.

Portfolio picks

We have added Kiatnakin Bank (KKP) to the High Yield category. We expect KKP to continue to deliver decent growth for both its commercial banking and capital market businesses. The stock offers a high dividend yield of 7% in FY19F. We have also added PTT Plc. (PTT) to the Blue Chip category. Being an integrated company with lower concentration risks and potential benefits from downstream activities. We have added Amata Corporation (AMATA) to the Growth category, as we expect the company to be a prime beneficiary of the Eastern Economic Corridor initiative and the US-China trade tension. The stock is also trading at a deep discount to its NAV.

We have removed Delta Electronics (DELTA) and Indorama Ventures (IVL) from the Growth category. DELTA's share price has now exceeded our target price. IVL's share price could suffer from the softening petrochemical outlook. We also removed LHHOTEL from the High Yield Category as the stock price has exceeded our target price, and replaced it with AIMIRT.

All in all, our model portfolio has generated a realised capital gain of 17.1% and unrealised capital gain of 26.8% since its initiation on 31 July 2017, versus general market returns of 11.7% over the same period..

 
Portfolio Performance

Stock

Entry Date

Entry Price (Bt)

Exit Price (Bt)*

Realised gain/loss, including dividend (%)

Land & Houses

31 July 2017

9.95

10.10

5.5

Beauty Community

31 July 2017

11.70

16.80

44.9

Jasmine Broadband Internet Infrastructure Fund

31 July 2017

11.40

12.00

7.1

Ananda Development

31 July 2017

4.88

6.05

25.2

Minor International

31 July 2017

41.50

38.75

-5.7

Kasikornbank

31 July 2017

197.50

194.50

0.5

TMB Bank

17 Oct 2017

2.62

2.36

-7.6

Amata Corporation

31 July 2017

15.90

22.80

48.2

Muangthai Capital

25 Sept 2017

34.75

49.00

41.5

Land & Houses

9 May 2018

10.70

10.00

-2.8

Indorama Ventures

22 Dec 2017

53.00

48.25

-5.9

Delta Electronics (Thailand)

21 Nov 2018

68.75

74.75

12.1

LH Hotel Leasehold REIT

31 Jul 2017

13.20

18.90

58.8

Average realised gain

17.1
         
Stock

Entry Date

Entry Price (Bt)

Price at 22 Apr 2019 (Bt)

Gain/loss since inclusion, including dividend (%)

Bangkok Expressway and Metro

31 July 2017

7.45

10.30

40.8

Bangkok Bank

31 July 2017

197.50

210.00

10.6

Digital Telecommunications Infrastructure Fund

31 July 2017

14.40

15.50

21.5

WHA Premium Growth Freehold And Leaseh

9 May 2018

10.40

13.40

34.3

Kiatnakin Bank

22 Apr 2019

69.50

69.50

-

PTT Plc

22 Apr 2019

49.25

49.25

-

Amata Corporation

22 Apr 2019

22.20

22.20

-

AIM Industrial Growth REIT

22 Apr 2019

12.20

12.20

-

 Average unrealised gain

26.8

 

Blue Chips

Risk Profile: You look to include blue chips into your portfolio to provide steady growth over a longer time period. Blue chips tend to be more stable and their holding period can extend beyond a year.

 

Company

Price
(Bt)
22 Apr

Target Price (Bt)

Upside (%)*

Entry Date

Entry Price (Bt)

Gain/(Loss)
% incl div

Bangkok Expressway and Metro

10.30

11.80

14.6

31 July 2017

7.45

40.8

Bangkok Bank

210.00

250.00

19.0

31 July 2017

197.50

10.6

PTT Plc

49.25

55.00

11.7

22 Apr 2019

49.25

0.0


 

 

Dividend

Risk Profile: Income investing is part of your stock-picking strategies. You look to include dividend stocks into your portfolio to provide a steady income stream.
 
Company

Price 
(Bt)
22 Apr

Target Price
(Bt)

Upside (%)*

Entry Date

Entry Price (Bt)

Gain/(Loss)
% incl div

Digital Telecommunications Infrastructure Fund

15.50

16.20

4.5

31 July 2017

14.40

21.5

AIM Industrial Growth
Freehold and Leasehold

12.20

13.10

7.4

22 Apr 2019

12.20

0.0

WHA REIT

13.40

14.20

6.0

09 May 2018

10.40

34.3

Kiatnakin Bank

69.50

97.00

39.6

22 Apr 2019

69.50

0.0



Growth

Risk Profile: Your primary investment goal is capital growth. You can tolerate a fair amount of fluctuations in the value of your stock investment in anticipation of possible higher returns. The investment horizon is up to 12 months.
 

Company

Price 
(Bt)
22 Apr

Target Price
(Bt)

Upside (%)*

Entry Date

Entry Price (Bt)

Gain/(Loss)
% incl div

Amata Corporation

22.20

25.50

14.9

22 Apr 2019

22.20

0.0

* Upside excludes dividend.



For a detailed breakdown of the different portfolios, click the Download PDF link at the top right of this page.

Click for an overview of recommended stocks.

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